UK banks charging hidden transfer fees for international payments
UK banks charge SMEs nearly £4bn in hidden transfer fees each year to make international payments, according to a study commissioned by online currency exchange and international payments service Money Mover.
The study found that 96% of the revenue for a bank for an average transaction of £75,000 within the EU comes from the margin that banks add to the exchange rate they receive from the money markets – known as the ‘spread’. The charge is hidden in the exchange rate, therefore the SME will never see it - even though it makes up the majority of the amount that the bank charges the SME. The average total transaction cost charged by a bank to a SME customer on a transfer of £75,000 is 2.4%, or £1,822. Of this cost, £1,807 is based on the spread, which is hidden from the customer.
Overall, SMEs will pay between 1.1% and 3.7% of the transfer amount due to spread. This hidden charge is in addition to the upfront fee that banks disclose when making a transfer. Including fixed fees, the highest rate charged is 3.% per transfer and thelowest is 1.14% for transfers in excess of £100k.
Commenting on the findings of the study, Money Mover CEO Hamish Anderson said, “When it comes to international payments, it’s clear that the UK’s major banks are overcharging and underserving their SME customers. The UK’s banks are collectively failing to give SMEs the knowledge, transparency and visibility that they need to make an intelligent and informed decision. This lack of transparency is not only unfair and uncompetitive, it’s also costing the UK’s SMEs precious cash in unnecessary fees.”
UK banks charge SMEs £4bn in hidden international money transfer costs https://t.co/Way0zgnNmb— Payments C&M (@PaymentsCardsM) January 11, 2016
Demand for wine increasing in Asia
Over the past few years there has been an increasing demand for fine wine investments in Asia, according to Cult Wines, a specialist in the acquisition & investment management of the product.
Of the $352 million (£ equivalent) of wine sold at auction in 2014, for example, some $104 million, or 30%, was accounted for by Hong Kong alone. By 2024 it is predicted that China will boast nearly 15,700 ultra-high net worth individuals and 338 billionaires. It is already the single biggest consumer of luxury goods around the world, accounting for some 29% of the global luxury spend and its consumption of wine has been growing by 20% a year.
Cult Wines has identified strict limitations on supply and rising demand from wealthy buyers in Asia. There are more than a million wine producers in the world, producing approximately 2.8 billion cases of wine each year, yet global consumption is around three billion cases a year. At the same time, fine wine has increased in popularity as a wealth store, providing a hedge against inflation, as well as protection against low interest rates and currency fluctuations.